Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 2: Tim Steneveek on Bloomberg Radio.
Speaker 3: I want to talk a little bit about those Qualcomm
Speaker 3: earnings and also the results that we got from ARM Holding.
Speaker 3: Let's get to it with Jackie Devalos. She follows the
Speaker 3: tech sector for us here at Bloomberg and she joins
Speaker 3: us now. So Jackie, let's start with Qualcomm, because we
Speaker 3: definitely did see a big bump up in the aftermarket trade.
Speaker 3: Tell us about the results and what stands out for you.
Speaker 1: Well, there's a few things here that investors were looking for,
Speaker 1: and the first really starts off with the forecast. The
Speaker 1: company said it's going to be bringing in somewhere between
Speaker 1: ten point five billion to about eleven point three billion.
Speaker 1: That beat estimates, which was coming in at the lower
Speaker 1: end of ten point five billion, so that was a
Speaker 1: solid beat. Profit also is expected to come in at
Speaker 1: around three dollars in a nickel per share, also beating
Speaker 1: expectations by margin. But overall, these higher level results represent
Speaker 1: kind of a recovery in this very important part of
Speaker 1: the business for the company, which is it's smartphone sector.
Speaker 1: China in particular has been kind of a question mark.
Speaker 1: You know, you've seen this slump in this in the
Speaker 1: smartphone market broadly. But Qualcom said that China sales of
Speaker 1: some of its Android based phones actually increased about forty percent,
Speaker 1: which is a really bullish sign for the company. Of course,
Speaker 1: Qualcom gets sixty percent of its revenue from the smartphone business,
Speaker 1: so overall, this is a good sign that it is
Speaker 1: kind of kind of overcoming the broader challenges in that market.
Speaker 2: Can we look at Apple as like, look at this
Speaker 2: as a bell weather for Apple? I mean, look, we
Speaker 2: already heard from Apple, but this is a company, right
Speaker 2: that gets twenty seven percent jackie of its revenue from
Speaker 2: from Apple, twenty one percent from Samsung, and then it
Speaker 2: goes down to Shaumi at five point five percent. So
Speaker 2: can does this tell us? Does it give us any
Speaker 2: insight into how Apple's doing?
Speaker 1: You know, it could offer some signs there because you know,
Speaker 1: if anyone's going to feel at first it is a
Speaker 1: company like Qualcom, so of course we can kind of
Speaker 1: gather perhaps an early sign there that perhaps that market
Speaker 1: is seeing a little bit of a recovery. We'll just
Speaker 1: have to kind of wait and see for Apple's results
Speaker 1: in the meantime, just kind of knowing how this kind
Speaker 1: of at this part of the supply chain, what the
Speaker 1: recovery is looking like. Forty percent increase, that's not nothing,
Speaker 1: It's fairly substantial. So I think, you know, for other
Speaker 1: businesses that depend on smartphones kind of moving over to
Speaker 1: arm for example, you know, who was also incredibly dependent
Speaker 1: on that, but their story is a little bit different
Speaker 1: in that the bar was a lot higher because of
Speaker 1: this AI expectation. Now a lot could be kind of
Speaker 1: deduced that maybe investors are just kind of thinking this
Speaker 1: is a little bit you know, it's run its course.
Speaker 1: Its revenue numbers came in, you know, at one eight
Speaker 1: hundred and forty four million, that beat expectations for this
Speaker 1: for this quarter at eight hundred and ten million beat there.
Speaker 1: Its revenue forecast was the midpoint was a little bit
Speaker 1: lower than what investors had been forecasting. But again, I
Speaker 1: think this is more of the AI story and the
Speaker 1: disappointment there.
Speaker 3: Yeah, yeah, yeah, Hey, listen, I'm just curious as we
Speaker 3: watch these stocks in the aftermarket, and certainly we'll probably
Speaker 3: maybe you know, touch on them tomorrow as well. Is
Speaker 3: there let's go to Qualcom first. Is there a number
Speaker 3: one question that's top of mind that you think analysts
Speaker 3: need to be asking on the call.
Speaker 1: I think they will want to know how lasting this
Speaker 1: China recovery is. Looking they maintained their guidance for the year.
Speaker 1: I think for the next couple quarters there there's a
Speaker 1: lot that can change. Clearly, that market is the most
Speaker 1: vulnerable out of its kind of it's entire portfolios. So
Speaker 1: I think the longevity of that recovery is something they'll
Speaker 1: be asking about.
Speaker 2: What about ARM? Looking at shares a ARM in the
Speaker 2: after hours right now, bouncing around but down about three
Speaker 2: percent as we speak. As a reminder, second quarter revenue
Speaker 2: came in above estimates. Again, you know, this is when
Speaker 2: we're talking about a company that does chips looking at
Speaker 2: revenue for a quarter of eight hundred and forty four million.
Speaker 3: I know, I know, it's a different scale.
Speaker 2: It's a different scale than a company like a you know,
Speaker 2: if we'll hear from later this month, go ahead, Jackie.
Speaker 1: One sign there that that is a positive maybe they're
Speaker 1: not getting credit for is that profit analysts we're expecting
Speaker 1: around thirty four cents, and they projected that in this
Speaker 1: current quarter, it's going to come in somewhere between thirty
Speaker 1: two and thirty six. That's kind of, you know, pretty
Speaker 1: much in line. I think the big question there is
Speaker 1: how much are you diversifying that revenue base, how much
Speaker 1: of this is coming from AI? Is it paying off?
Speaker 1: Perhaps that bar, like I said, is a little bit higher,
Speaker 1: but any insight into you know, whether those profits are
Speaker 1: being generated from that line of business will be fairly key.
Speaker 3: All Right, We're gonna leave it on that note. Hey, listen, Jackie,
Speaker 3: thank you so much for walking us through. Jackie Devalos
Speaker 3: with a lowdown on both qualcommon arm holdings. As we said,
Speaker 3: both of them are moving in the aftermarket.